Kim Hoe-jae, a researcher at Daishin Securities Co., on the 5th projected that KT's decision to offer free SIM replacements for all customers as a measure after the hacking incident will incur an expense of about 100 billion won.
Kim kept a buy investment rating on KT that day, with a target price of 74,000 won. That is 34.6% higher than the previous day's close of 48,400 won.
Kim said, "The replacement expense is expected to be reflected in fourth-quarter results, but the actual expense reflected will be around 30%." The SIM replacement and the SIM information protection service provide the same level of security effect, because after the hacking incident at SKT in April, many KT and LG Uplus customers also signed up for the SIM information protection service to a significant extent. Kim noted that although SKT carried out free SIM replacements for all customers, the actual replacement rate is estimated to be below 50%.
KT held a board meeting on the 4th and approved free SIM replacements. The free replacement applies to 17 million people, combining 14 million of its own customers and 3 million budget phone customers. Starting at 9 a.m. that day, customers who applied through KT.com and the dedicated SIM replacement center can get replacements at KT dealerships. From the 11th, self-activation via parcel delivery will also be available.
Meanwhile, KT CEO Kim Young-shub conveyed at the board meeting the previous day that he would not seek another term. Accordingly, the board's director nomination committee will conduct screening and make recommendations for candidates from both inside and outside the company.
Kim said, "KT's share price has seen increased volatility around CEO transition periods," adding, "It is positive that the current CEO did not apply for another term, as it resolves uncertainty early."